Saft May Buy Back Shares After Johnson Payment, Jefferies Says

Saft Groupe SA (SAFT), a French maker of batteries used in space and military electronics, may buy back shares after getting $145 million for the termination of a joint venture with Johnson Controls Inc. (JCI), according to Alex Barnett, an analyst at Jefferies International.

“There is significant scope for a special dividend” or a buyback, Barnett wrote in a report. “With the $145 million JCI payment expected Oct. 1, management is now evaluating optimal capital structure, and refinancing outstanding debt due mid-2012 is the near-term priority,” said the London-based analyst, who has a “buy” recommendation on Saft shares.

A decision to give money to shareholders or buy shares may not occur immediately because of acquisition opportunities and “market jitters,” Barnett said after meeting with Saft management and customers in Jacksonville, Florida, where the company started production at a lithium-ion battery factory last week.

“We’re going to study whether to go back into the car market, we have a refinancing to make next year, and there may be other things to do with that money,” Jill Ledger, Saft’s communications and investor relations director, said today in a telephone interview. “We’ll look at all options. We certainly won’t rush to make a decision.”

Saft, based in Bagnolet near Paris, and Milwaukee-based Johnson Controls agreed this month to end a joint venture for vehicle batteries formed in 2006. Johnson Controls will buy Saft’s share for $145 million in cash, and the transaction could close as soon as Sept. 30, Saft and Johnson Controls said in a joint statement on Sept. 2.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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